Buying a live in flip, knowing in two years your proceeds are capital gains tax free, is definitely a solid plan.

@Manco Snead  it sounds like your numbers are pretty good...when the numbers are good, obviously there's a lot more incentive to keep the property (esp. since you have a low rate that you presumably can't replicate at another property)....you didn't mention how much you put down, but you did say you put 20k into rehab...look at how much total you have in the property, and calculate your returns (both with cashflow, and also with appreciation), and that will give you a better idea of how to proceed (it's also worth calculating ROE).Usually, when people describe an OOS property with terrible tenants and a bad PM, the problems are occurring because it's a C or lower property/neighborhood...but you said it's a "clean" neighborhood...would you say it's an A or B neighborhood? 

Let me know what you think.As a matter of information, smoking is prohibited inside our rental units.If you decide that the apartment would meet your needs and wish to proceed with the application process, a “deposit to hold” binder equal to a month’s rent would need to be collected at that time.

And this already carries a lot of risk, because the outcome and timing of the probate proceedings is unknown, and Cousin Joe could show up out of the blue with a will that left the house to him and blow your plan out of the water. 

I will most definitely keep this information in the forefront of my mind as I proceed.

The issue is you never know which group you are in until it's too late and your livelihood is at stake - at which point you are no longer allowed to restructure until after the legal proceedings are completed.

So Net proceeds ~ $340,000I was pretty surprised with how much they offered and how fast they went.

So far what I found is she has to get her fingerprints submitted and then proceed to take some online courses.

Third option is proceed with removing them however you do it (cash for keys, eviction, etc.).Other options probably exist that more creative people will post, but that's the three ways I'd look at it.

Then, if you choose to proceed, at least you'll know what you getting into.But...it takes two to tango, and this can be a two-way game: if the bank hits you with the DOS letter, you can transfer the property back in your name to cure the problem and play that game, back and forth, if you want/can/afford.